A new storm over the building of Jewish settlements in the West Bank is threatening both the peace process and the Israeli government’s stability.

The dispute over settlement construction is also deepening doubts about the wisdom of the original Israeli-Palestinian self-rule accord.

That agreement prescribes an “interim agreement” on Palestinian autonomy for a period of five years, while purporting to leave such thorny issues as the settlements to later negotiations on the “permanent status” of the territories.

This week’s dramatic events on a hill between Efrat, one of several Jewish settlements in the area known as Gush Etzion, and a neighboring Arab village of Al-Khader, seemed to show that settlements cannot be postponed.

They are living — and growing — entities that force themselves onto the political agenda.

At the heart of the dispute are plans for Efrat to build 500 new housing units on a plot of land near Bethlehem that residents of Al-Khader say belong to them.

The news this week was dominated by re- peated ugly scenes of jostling between settlers, soldiers and Arab villagers, while bulldozers went about their noisy business under the guard of the Israeli army.

By midweek, government ministers braced for a tense and strident Cabinet meeting set for Monday.

And all the while, Yasser Arafat’s Palestinian Authority in the Gaza Strip warned ominously of irreversible damage to the peace process.

Prime Minister Yitzhak Rabin ordered the attorney general to present the Cabinet with a clear and comprehensive legal overview of rights at the disputed site.

But Cabinet ministers on the left insisted that the issue was essentially political, not legal.

MINISTERS CALL TO STOP CONSTRUCTION WORK

Ministers Shulamit Aloni and Yossi Sarid, both of Meretz, demanded categorically that the Cabinet act to stop the new settlement work — even if the settlers are within their strict legal rights in flattening the disputed barren hilltop where they plan to build the new homes.

At the same time, however, two Labor Knesset members were winning cheers and hugs in Alon Shevut, near Efrat, from assembled Jewish settlers.

“I represent a platform that plighted its troth to Greater Jerusalem — and that includes Gush Etzion,” declared Labor Knesset member Avigdor Kahalani, as his colleague Emanuel Zismann stood alongside him.

Several other Laborites, among them at least one minister, Economics Minister Shimon Shetreet, are known to share those sentiments.

Kahalani compared the Etzion settlers’ cause to that of settlers in the Golan Heights. Kahalani is also active in the movement formed there earlier this year to oppose any Israeli withdrawal made in an effort to achieve peace with Syria.

The comparison is significant: The Golan and Etzion settlement areas were, for decades, both considered to be within an unarticulated national consensus on borders, uniting most mainstream Israeli politicians.

That, at any rate, was the situation until the cataclysmic agreement between Rabin and Arafat in September 1993, when another pillar of the consensus — no negotiating with the Palestine Liberation Organization — came tumbling down.

But while the entire Labor Party accepted the 180-degree turnabout regarding the PLO, some of the party’s traditional hardliners remain uncomfortable both with the prospect of a Golan pullback and with the idea of an army redeployment in the West Bank and Gaza Strip, as required in the 1993 agreement.

The Efrat standoff, indeed, dovetails into a growing controversy over the redeployment scenario.

Recently leaked reports have top policymakers contemplating an initial redeployment from some of the West Bank towns.

Bethlehem and Jenin are said to be likely first candidates.

The Etzion settlers, considered relative moderates, are up in arms — almost literally.

Their leader, Rabbi Shlomo Riskin, formerly of New York, says they will set up their own armed militia to patrol the area if the army leaves Bethlehem.

This ongoing dispute has been greatly exacerbated by the Efrat clash.

The settlers — nearly all of them modern Orthodox, many of them recent immigrants from Western countries — feel that if the expansion program at Efrat is stopped by government order this will signal to Jews and Arabs alike that the planned redeployment is indeed the beginning of the end of the Jewish presence in the West Bank.

The Palestinians, for their part, say if the work is not stopped, they will see in this the beginning of the end of the peace process.

“Things would be put back by two years,” Palestinian Authority official Nabil Sha’ath said Wednesday.

Because the settlement question has burst through attempts to keep it in abeyance during the interim period, the whole rationale of the interim agreement has inevitably taken a beating.

Deputy Foreign Minister Yossi Beilin is not the only member of the governing coalition to have suggested in recent weeks that Rabin and Arafat set aside their efforts to create an interim arrangement and instead immediately begin the permanent status talks.

He is, though, the only one to have dared to say so publicly. And he has incurred the prime minister’s wrath for his pains.

But this week’s events at Efrat, and Rabin’s obvious political distress, have reinforced such heretical thinking in the government camp.